Monetary benevolence for member diagnosed the Cancer

by Blake Hill
(Colorado)

One of the members at my church was just diagnosed with t-cell prolymphocytic leukemia.

He is a school teacher and his wife has been staying home with their younger children. We as a church body want to provide monetary assistance to this family to help with the medical bills. People and business in the community (as well as other church members) want to donate to this benevolence as well.

Is there any position the IRS will take if check are made out the Church with in the memo a designation for this individual.

Will this jeopardize my church’s 501(C)3 status? Will or could this be looked at as siphoning money from individuals to this specific person.

I believe the church should be in this ministry however this is not a direct part of our charter (to give to a specific person). From what I have researched it will take time to set up a trust or other vehicle that could qualify for exempt status for this individual and right now timing is of the essence.

How did you go about this?

Answer

You can take up a donation for this individual; however, the donations are not tax deductible. Gifts to an individual do not qualify as charitable donations, and the IRS does not allow a tax deduction for them.

According to Keith Hamilton, D.Ed.Min, CFP, “You cannot deduct contributions to specific individuals, including contributions to individuals who are needy or worthy. This includes contributions to a qualified organization like a church if you indicate that your contribution is for a specific person. But you can deduct a contribution that you give to a qualified organization that in turn helps needy or worthy individuals if you do not indicate that your contribution is for a specific person.”


Read more of this informative article and download a free Sample Benevolence Request Form.

He also lists the IRS’s required documentation for a benevolence payment from a church in the above article.

If some of the church members decide to hold a fundraiser for the family, they need to check with your state law as far as any major issues involved with fundraising for an individual. Again, gifts to an individual do not qualify as charitable donations.

Even though this article was written by the Attorney General of Massachusetts it gives some good pointers on the legal and tax issues involved with fundraising for an individual.

I think what you are wanting to do for this man and his family is wonderful. I also commend you for checking into the legal and tax side of it before you do anything. You may also want to consult a CPA, if you have any more concerns.

My husband was recently diagnosed with stage IV colon cancer. It is hard enough to deal with the emotional impact of being diagnosed with cancer without having to deal with the financial impact as well, so whatever you and your church can do for this family...I know from personal experience...will be greatly appreciated. They are in my prayers.

Hope this helps,



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